Property and Casualty Insurers Provision of Limited Prizes and Gifts

Santa Fe, NM - On October 9, 2019, the Office of the Superintendent of Insurance issued a Bulletin providing guidance on an amendment to the Insurance Code which became effective July 1, 2019. The amendment allows property and casualty insurers, producers and representatives thereof to provide customers or prospective customers “prizes and gifts, including goods, gift cards, gift certificates, charitable donations, raffle entries, meals, event tickets and other items not exceeding one hundred dollars ($100.00) in the aggregate in value per customer or prospective customer in any one calendars year”. 

It is been brought to the attention of our Office that some insurers, producers and agencies have been advised that the new statutory language and/or our October Bulletin prohibits those individuals and entities from making donations in their customary manner. 

Today Superintendent of Insurance Russell Toal issued a Bulletin clarifying that common and ordinary marketing practices are not regarded as "consideration" or "inducement" when there is no quid pro quo arrangement, and that donations to non-profit, charitable or educational organizations that are not insured by the company, agency or individual making the donation are not prohibited. 

Superintendent Toal stated: “It remains critical that we, as insurance regulators, protect consumers from discriminatory pricing and preserve competitive markets through prohibitions on unfair acts that distort regulated insurance rates. But it also is critical that insurance companies, agencies and producers are free to conduct common and routine business and marketing practices that don’t undermine the laws of the state. This Bulletin serves to protect the public, support the industry in a balanced and fair way, and ensures that charitable and educational entities can continue to receive support from the insurance industry.” 

The Bulletin can be found electronically at https://www.osi.state.nm.us/wp- content/uploads/2020/02/Bulletin2020-002.pdf. If you have any questions or complaints related to the Bulletin or enforcement of the Insurance Code, please contact the NMOSI Consumers Bureau at 505-827-4549. 

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